Financial Literacy: A Step for Clients towards Financial Inclusion

Government is also the key to effective consumer protection. In this rapidly evolving
landscape that will engage thousands who have never used financial services with an
array of entities that have never before provided them, the need for consumer protection
is mounting. Government engagement can lend legal weight to transparency and truth-inadvertising.
As consumer protection gains traction, so too will financial education as an
important tool to enable consumers to carry out their roles and responsibilities in the
consumer protection equation We have made the case that consumers’ access to services
must be accompanied access to information in order for them to make the best choices for
themselves. However, informed consumers are important for another reason: they can
make demands on institutions, exerting pressure for good customer service, appropriate
and transparent pricing and clear contracts.
While the dynamic nature of financial literacy and financial capability make it difficult to
lend specificity to their future, we are encouraged by the concrete successes of other
campaigns to change behavior. In the U.S., campaigns against littering and smoking have
had a remarkable impact, but one that took a generation to achieve. It is possible to
envisage building financial capability as a multifaceted campaign to promote better
money management that is active over many years and across a broad swath of the
population.
Conclusion
Fifteen years ago, ‘financial inclusion’ would likely have referred to an institutional issue
such as portfolio growth, mirroring a common question “How many clients do you
have?” Today the term is more centered on clients, encompassing both access (the
institutional responsibility) and use -- clients’ ability to choose and use the services
available to them. It implies financial capability. Financial education is essential to both
of these overlapping concepts. Yet, fifteen years ago, few in the developing world had
ever heard of financial education. Today, it is coming to your TV; your bank will send
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